IndiGo to fly abroad from August, spur competition

IndiGo, India’s second-biggest airline by passengers carried, is expected to commence international operations by the first week of August.

The low-fare carrier plans five daily flights from Mumbai and Delhi each, connecting Singapore, Bangkok, Dubai, Kathmandu and Muscat.

An announcement on this is expected early next week.
IndiGo president Aditya Ghosh was travelling and did not respond to an SMS seeking details.

According to sources, the airline has already received necessary clearances from the ministry of civil aviation and will be joining peers such as Air India, Jet Airways and JetLite, Kingfisher Airlines and SpiceJet on these competitive routes.

The Gurgaon-based carrier is run by InterGlobe General Aviation owned by Rahul Bhatia.

The Delhi-Singapore leg already has three airlines competing - Jet, Kingfisher and Air India.

On the Bangkok and Dubai sectors, competition is expected again from Jet whereas SpiceJet and JetLite are already flying to Kathmandu. Air India and Jet also fly to Muscat.

An official at a full-service carrier said IndiGo’s arrival on the scene is unlikely to result in any large shift in market dynamics.   

“Low-cost carries already operate on these routes. Air Arabia and FlyDubai offer low fares on the Gulf routes whereas Air Asia is very active on routes like Singapore. IndiGo is expected to use single configuration, all-economy seating on these flights. Since these are slightly long flights, passengers may not always prefer low fares to seating comfort,” he said, not wishing to be identified.

In the domestic market, IndiGo has been pretty successful with its strategy of low fares and consistent on-time performance but will it find success with the same attributes on international routes?
Vishwas Udgirkar, senior director with Deloitte Touche Tohmatsu India, says though there is very little likelihood of a fare war on these sectors, IndiGo’s domestic model may help it gain traction.

“IndiGo is a brand which offers value for money in the domestic market. If they replicate the model on international routes, they will do well,” he said.

The airline has ordered 180 A320s for deliveries between 2016 and 2025. From the previous order, about 14 aircraft are expected to join its fleet this year.

IndiGo uses 39 A320s on 259 daily domestic flights to connect 26 destinations. Government rules mandate five years of domestic experience and a 20-aircraft fleet before a domestic carrier can fly overseas.